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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />FEBRUARY 5, 2019 <br />TITLE: <br />APPROVE SECOND AMENDMENT TO <br />AGREEMENT WITH MERCY HOUSE LIVING <br />CENTERS, INC. FOR THE LINK SHELTER <br />{STRATEGIC PLAN NOS. 1,6; 5,4; 5,6} <br />- kA� Jnr <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 161 Reading <br />❑ Ordinance on 2nd Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager and the Clerk of the Council to execute a second amendment to the <br />agreement with Mercy House Living Centers, Inc., to authorize the expenditure of an additional <br />amount not to exceed $250,000 in Year 1 for the Santa Ana interim Emergency Homeless <br />Shelter (The Link), subject to non -substantive changes approved by the City Manager and City <br />Attorney. <br />DISCUSSION <br />On September 18, 2018, the City Council approved an agreement with Mercy House Living <br />Centers, Inc. (Mercy House) to operate an interim Emergency Homeless Shelter in Santa Ana for <br />a period of one year in the amount of $3,121,700, with the option to renew for up to one <br />additional year. The total maximum amount of the agreement was $6 million, which included a <br />contingency amount of $250,000 per year for additional services and reimbursable items. <br />On October 16, 2018, the agreement was amended to provide additional indemnification in favor <br />of Mercy House related to their lease agreement for the Link Shelter site. The original agreement <br />was based on an estimated annual budget with a provision for $250,000 in contingency costs <br />each year. The first year contingency funds were for building tenant improvements to the Link <br />Shelter, and have already been paid to Mercy House. <br />The total cost of tenant improvements exceeded the original amount anticipated in the first year <br />budget. Therefore, Mercy House has requested that the second year contingency funds be <br />moved to the first year to reimburse Mercy House for the additional expenses. The agreement <br />expenditure will be modified as follows: <br />Year 1 <br />Year 2 <br />Total <br />$3,371,700 <br />$2,628,300 <br />$6,000,000 <br />25C-1 <br />